AI In Lending, Affordable Renting, And Indirect Slowing

Five can't-miss data points this week on

From artificial intelligence in the decisioning process to the suppliers with next-gen solutions, this week, sinks its teeth into the lending machine.

Here are five can’t-miss data points:


There’s nothing artificial about the intelligence First Financial Federal Credit Union is applying to the new loan decisioning solution the credit union has created in-house. The Baltimore-area cooperative is applying artificial intelligence and machine learning techniques to the new Anytime Express lending products it plans to launch this summer. To test run its technology, the credit union ran an in-house promotional offer for a $1,000 loan that 32 credit union employees took out; as the system learns from its growing data store of credit scores and payment histories, its capability will only improve.

Read: First Financial Creates In-House AI/ML Lending Experience

764 Sq. Ft.

Consolidated Community Credit Union is an accomplished mortgage lender that is now taking on its local housing crunch by helping renters, too. Consolidated has partnered with the Northwest Credit Union Foundation and two other local cooperatives to offer a security deposit loan that is designed to help people find a better place to live. Consolidated’s website describes the loan as a way to remove the financial barriers of rental housing. The hot Portland market can make those barriers especially high, says Consolidated president and CEO Larry Ellifritz. According to Ellifritz, the average monthly rental of a one-bedroom, 764-square-foot apartment is $1,548; a three-bedroom house averages $2,752.

Read: Putting Portland Rentals Within Reach


At credit unions nationwide, indirect loans mostly auto loans originated at the dealership and financed by credit unions grew at their lowest annual growth rate since March 2012, up only 4.6% over the last 12 months. At a small but growing number of credit unions, indirect lending also includes such items as swimming pools, boats, and solar panels. However, auto loans still make up the majority of indirect balances, and as growth of indirect lending slows, so has the growth rate of the credit union industry’s auto loan portfolio. Year-over-year, total auto loan balances grew by 3.5%, well below the 10.8% rate reported in September 2018.

Read: Indirect Lending Growth Tails Off Sharply

10.3 Percentage Points

It may be the middle of winter, but the credit union loan portfolio has finally started to heat up. In early 2019, rising interest rates dampened consumer borrowing appetites, leading to the lowest first quarter loan origination performance in three years. In third quarter, however, originations have spiked. Credit unions originated some $151.0 billion in loans in the third quarter of 2019, the highest third quarter performance on record. This, despite the fact that new and used auto loan growth decelerated 10.3 and 5.4 percentage points year-over-year, respectively.

Read: Loan Balances Vs. Originations: A Tale Of The Tape


A new year means a new opportunity to make smart investments for your credit union. There are many products, services, and solutions that promise the world in a sound bite, which makes it difficult to determine which ones have real teeth. The Vendor Showcase on breaks down the problems leading suppliers solve and gives them a chance to tell credit union leaders about what makes them stand out in a crowded industry. In this Vendor Showcase, singles out eight suppliers with solutions geared to the loan process.

Read: 2020 Lending/LOS Vendor Showcase

Happy Reading!

February 3, 2020

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